Many existing and potential business owners think of business law as being solely about meeting their legal requirements. But as was demonstrated via a recent InnoClub online workshop, being proactive when it comes to understanding the right structures and processes can save you money - and potentially your business.
Operational Legal Australia (OLA) is a Veteran-owned law firm that presented our Business Law 101 workshop to participants from around the country. A regionally based firm with national reach, OLA offers a range of legal and non legal services to businesses, Veterans, First Responders and their families.
OLA directors Paul James (ex Army and NSW Police) and Mick Bainbridge (ex Army) were joined by senior commercial and business lawyer Steven Fuller in presenting an interactive session on key considerations for any business, regardless of size or stage of operation. This post shares some of the main messages from their presentation.
1. Business Structures:
Business owners often have more ways to establish and structure their operations than they realise. The best type of structure can not only minimise costs, such as the amount of taxes paid, but minimise legal risks to owners.
Some of the different structures discussed included:
Sole Traders
Partnerships
Companies, limited by shares
Companies, limited by guarantee, and
Associations
An outline of the relevant benefits and disadvantages was provided for each structure. Participants learnt that the advantage of a Sole Trader for instance was the low cost to establish, though the disadvantage was in unlimited liability on the owner.
A Company on the other hand provides limits on the liability of owners, but carries with it more complex regulatory and reporting requirements, and costs to set up and maintain.
2. Corporate Governance:
Corporate Governance refers to the system of rules, practices and processes by which a business is directed and controlled.
Regardless of the type of business structure, Corporate Governance is beneficial to every business. The discipline aims to ensure the company conforms with its internal policies and external regulations and laws.
Business owners play a crucial role in establishing and maintaining an effective Corporate Governance system, and in doing so, are proactively minimising risks and defining safe guards to protect the business.
3. Intellectual Property:
All too often, people rush to establish a business without ensuring their ideas and operations are adequately protected.
By securing intellectual property protection, you are given the legal right to exclude others from using your invention, creation, or work without your permission. This can not only provide competitive advantage, but increase the value of your business significantly.
A number of different Intellectual Property types were then discussed, including:
Trade Marks
Designs
Patents
Plant Breeder Rights
Copyright
Trade Secrets, and
Common Law Trade Marks
The workshop concluded with a summary of reasons why businesses often failed, based on the experiences of the OLA team. Common reasons include:
Poor Planning - everything from not having the correct structure for the type of business being run, through to scenarios where two friends start a business but don't have the proper contractual agreements in place between them.
Legal Requirements - many small business operators in particular are so eager to start trading that they fail to properly identify the legal and regulatory requirements they need to meet.
Remaining Compliant - laws regularly change, so not only is it critical to understand your legal requirements, it's essential to remain aware of changes that can impact your compliance.
The information provided by the OLA team during the workshop was invaluable, and based on the discussions and interaction by participants, exactly the kind of insights InnoClub is committed to providing our community.
If you have any questions regarding the right legal advice for your business, please contact us and we'll connect you to the OLA team.